Definition
Sub-Limit
A sub-limit is a cap within a health policy on the amount payable for a specific treatment, procedure or expense category, regardless of the overall sum insured.
Even with a large sum insured, a policy may restrict payouts for specific items, such as a fixed cap on cataract surgery, knee replacement, or a percentage limit on certain modern treatments. These sub-limits control the insurer's exposure to commonly inflated procedures.
Sub-limits can create unexpected out-of-pocket costs, so buyers should scan the policy schedule for them before purchase. Plans marketed as 'no sub-limit' (apart from any room-rent terms) offer cleaner cover. Disease-wise capping is a frequent source of partial claim settlements in India.
Related terms
- Room-Rent CappingRoom-rent capping limits the daily hospital room charge a health policy will pay, often as a percentage of the sum insured.
- Proportionate DeductionProportionate deduction reduces a health claim across all associated charges when the patient occupies a room costing more than the policy's room-rent limit.
- Daycare ProceduresDaycare procedures are medical treatments that, thanks to technology, are completed in under 24 hours and are covered by health policies despite not meeting the standard hospitalisation requirement.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.